Poof! Just like that, more than $3.5 billion has vanished from the County of Orange’s financial cushion.

It’s not the ghost of Bob Citron wreaking havoc here. The shrinking cushion is the result of new egghead accounting rules, requiring public agencies to factor their sizable pension liabilities into their official financial statements for the first time.

Before, those numbers lurked in the footnotes like shadows – not really there, not really accounted for. No more.

The County of Orange’s “net position” – total assets minus total liabilities – shrank from a comfortable $5.5 billion to just $2 billion as a result of the new rule. A similar scenario will play out with public agencies of all kinds in coming weeks as they release financial statements for the fiscal year that ended in June.

“It shouldn’t come as a shock to anyone who’s been looking at the county’s financial statements,” said Eric Woolery, the county’s elected auditor-controller — i.e., numbers guy. “We actually had a very good year. Revenues were up.”

The number assigned to pension liabilities – $3.9 billion – is an educated guess, Woolery stressed, conjured from a stew of more than 20 different ingredients, including the expected rate of return on pension investments, how long people will live, inflation rates and worker pay raises. As those assumptions change, so do liability numbers.

The $3.9 billion is up from $3.8 billion in 2014, but down from $4.3 billion in 2013.

Why does this matter to you, Joe Citizen? Only to a) underscore that, yes, this is money that really must be paid some day, even if the amounts swell and shrink with time and circumstance; and b) it could have a modest impact on your wallet.

Governments borrow money all the time to do things like build roads and buildings. Having an officially slimmer bottom line could translate into raised eyebrows from lenders, and perhaps higher interest rates on loans.

However, the county is about to pay off a large, historically significant loan.

Back in 1994, county treasurer Citron’s wrong-way bets on interest rates imploded. The county fled into federal bankruptcy court, the largest government to ever do so at the time. And Citron’s investment pool lost a staggering $1.64 billion.

The county vowed to repay the cities, schools and other public agencies that had money invested in the pool, and borrowed $1 billion to make that happen. It has been paying off that debt ever since, averaging $69 million a year – money that could have funded better roads, libraries, health care and myriad other services for Joe Citizen.

This year, the county will retire its second-to-last bankruptcy bill with an $18.4 million payment. Next year, it will retire its last with a $5.9 million payment.

Total tab for the investment debacle: $1.6 billion, to repay $1 billion.

This, officials said, will clear the path to invest in important projects such as a homeless shelter and a new animal shelter.

Teri Sforza is one of the lead reporters on the OCR/SCNG probe of fraud, abuse and death in the Southern California addiction treatment industry. Our "Rehab Riviera" coverage won first place for investigative reporting from the California Newspaper Publishers Association, first place for projects reporting from Best of the West and is a finalist for the National Institute for Health Care Management Foundation's print award, competing with the New York Times, the Washington Post and ProPublica. Sforza birthed the Watchdog column for The Orange County Register in 2008, aiming to keep a critical (but good-humored) eye on governments and nonprofits, large and small. It won first place for public service reporting from the California Newspaper Publishers Association in 2010. She also contributed to the OCR's Pulitzer Prize-winning investigation of fertility fraud at UC Irvine, covered what was then the largest municipal bankruptcy in America‘s history, and is the author of "The Strangest Song," the first book to tell the story of a genetic condition called Williams syndrome and the extraordinary musicality of many of the people who have it. She earned her M.F.A. from UCLA's School of Theater, Film and Television, and enjoys making documentaries, including the OCR's first: "The Boy Monk," a story that was also told as a series in print. Watchdogs need help: Point us to documents that can help tell stories that need to be told, and we'll do the rest. Send tips to watchdog@ocregister.com.